The Smart Retirement Plan series continues with a discussion of Smart Review and Smart Income Streams. Have you heard from your advisor lately? It’s important to have your finances reviewed at least once a year to ensure you are on track to reach your goals.

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8.31.22: Audio automatically transcribed by Sonix

8.31.22: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to take point on retirement with your host, Erick Arnett. Erick is a fiduciary and licensed financial advisor who always places your needs first. The experienced team at Tape Point Wealth Management takes pride in knowing they've helped so many pursue the financial future of their dreams. And they can help you, too. And now let's start the show. Here's Erick Arnett.

Erick Arnett:
Well, welcome, everybody, once again to another show. Take point on retirement radio. We're so glad you're here listening to us today. Thank you so much for making this show such a success. And we're really honored to be able to reach out to folks, educate them and and really just try to make a difference. So thanks for listening. I think we have a great show today. We have. Of course, Sam is always with us. Mr. Sam Davis. Good morning, sir.

Producer:
Good morning, Erick. And yeah, we do have a great show planned today talking a lot about building those smart income streams for retirement, because so many people have done a great job saving, but they don't have a plan for how they're going to effectively get that money out and support them during retirement. I mean, there's a lot of things to consider, like taxes and and not overdrawing on your accounts. And we're going to touch on all that today.

Erick Arnett:
Yeah, I think it's a great time to really I'm glad we put this show together today. We're really just going to focus on income, income planning and the importance of that and all the different aspects that are involved there. You know, with inflation just continuing to be extremely strong and with no real relief in sight. I'm looking at a lot of the headlines this morning and we're still seeing a lot of inflationary pressures that maybe we won't even see for a while. It's I'm looking at CEO reports and different corporations and how they're really, really struggling with the rising costs and trying to keep the cost of goods and services down. And it's putting a lot of pressure even on their numbers. And so, so, so important. We've been talking about this for years and years and years. It's it's really when you're going into retirement, even thinking about retirement, you could be five or ten years out from retirement, you have to think about income and and what's going to provide that steady stream of income where, you know, it's not going to be affected by the markets and the economy. And there's there's ways that we can put that in place for you and really shore up that income. So today we're going to talk about the smart retirement plan, the smart income plan.

Erick Arnett:
We're going to talk a little bit about Social Security, Social Security, income, Medicare. We're also going to talk about that retirement income gap, that analysis and plan that goes into plan for that retirement income gap. And then we're going to get into our annuity 360. You're going have some audio there again and just a super great book and real helpful. And then we'll get into some other little tidbits, but really just focusing on income, I wanted to make sure that we thank our listeners. If you we're on here every Saturday, Sunday, and then we also have our podcast. So if you miss the show, you can always catch the show and catch up. On our podcast. We have a website take point on retirement radio. You just go right to that website and catch our podcast any time. Or you can go to any podcast app on your phone, the Apple app, all kinds of podcast apps, and you can just type in take point on retirement and we should pop up there and you can catch up on different episodes. And of course, if you just want to go to our website, take point wealth management or even take point on retirement in one of those just Google Take point, get one of those websites in the upper right hand corner, there's a little button you can just click there and you can set up a free consultation with us.

Erick Arnett:
And we're also standing by the phone right now. 3526160511. That's 3526160511. We're standing by right now to offer you that total free, comprehensive retirement plan consultation. Maybe you have a plan in place and that's great. So let's let's let's take a look at it. Maybe it makes sense to have a third party take a look at it and we'll both test your plan. So a little bit different than other investment management shops perhaps. But we take that plan, we test it. We actually throw 1000 scenarios at your plan. We stress test it. Good markets, bad markets, higher rates, low rates, inflation, deflation combinations thereof. And I'm going to. Yes, Sam, that most people, if they have a plan and they put a plan in place, they did not plan on having eight, 9% inflationary increases. And that's just an average. If you go across the board, look at gasoline, food costs, you see upwards of 35, 40% huge increases in housing and you name it across the board, everything is more expensive. And so if you didn't plan for that, you may have to go back to work. You know, you may have to work a little bit longer. Who knows? But we we need to plan for these increases.

Erick Arnett:
And we've been talking about it for years, been warning folks that it's coming. And we also are been warning folks about increased taxes. So those two things right there, Sam, increase taxes and increases in inflation. What do they do? They eat into your cash flow. Right. So if you're retired and you're going to be living on a fixed income or you're going to be, you know, also maybe you're going to be relying on your investments to provide a supplementary income to your Social Security or pension. You know, it's it's difficult when we have such volatility in the markets. And so your plan may not be holding up like you thought it would. And so if you're pulling money from your portfolio as well as you're losing value in your bonds and your stocks, it's very difficult to to count on that steady stream of income. And so we have strategies in place. We can help you right now. Give us a call. 3526160511 to shore up that income and make sure that you don't run out of money in retirement. And that's the number one fear, right? When we poll everybody out there, the number one fear is losing or not losing, but running out of money and retirement. In fact, Sam, this kind of hits home because we do.

Erick Arnett:
We do. We do a bunch of plans every week. And I was actually doing a plan yesterday, and this couple had told me kind of what they want to live on in retirement. And so I factored that into the plan and they came up way short on their probability of success. And so we have to we had to reduce the income by 30% that they would have to that they would be able to take and retirement in order to make this plan work and look successful. And so that's what we do. We don't just kind of put some portfolios together, set them on a shelf, set it and forget it and hope things work out long term. We actually put a solid game plan in place. First and foremost, protecting your income. You know, you've got to have income. Your income needs to be growing and and to to combat that inflation. So more important than just chasing returns and having this big basket of different investments and not really knowing what you're paying and fees, not knowing the risk that you have, not even knowing what kind of income it's producing. You know, I think now because of what we're going through in our in our country or in the in the world right now with the crazy inflation. And now they're even talking about raising taxes on us wild spending up there in Washington.

Erick Arnett:
So, you know, it's 87,000 more IRS agents coming. They're coming. They're coming after the tax dollars and and the revenue. And so we you know, we've been talking and warning people for years. We were out doing seminars. I was thinking about this the other day. We were doing seminars and educational events four years ago and several of the slides. I can pull them up right now and look at them. Several of the slides from four or five years ago was inflation increase in taxes and how that's going to impact our retirees. So those that were able to plan for that, great, but it's never too late. You really need to reach out to us today. I'm standing by the phone. I want to help you guys today. I'm very passionate about this. It's 3526160511. If you don't want to talk to me, you can just go to my website. Just Google Take Point Wealth and you go to that website and just click on and set up a consultation. You'll go right into my calendar and we'll get 15 to 20 minutes to chat and we'll get you set on the right path of creating a solid income. And so with that being said, Sam, do you want to read the quote of the week.

Producer:
Now of wholesome financial wisdom? It's time for the quote of the week.

Producer:
Yes. Erick, this week's Quote of the Week comes from Jim Rowan. And Jim said time is more valuable than money. You can get more money, but you cannot get more time. And Erick, I think this is perfect considering what you were just saying about the importance of having a plan. Everybody's situation is different. And one of the things to consider is, is how much time you have left, where you're at in the course of your life. That affects how the plan is constructed. Right.

Erick Arnett:
Yeah, absolutely. You know, and we talk a lot about money and we talk about income and investments and and retirement plans. But something I was thinking about the other day is when we do our retirement plans, you know, we sit down with folks and we first ask them, you know, what does retirement look like to you? What are your goals and what are you doing? How are you enjoying yourself? You know, let's face it. You know, we get to the stage in life and, you know, there's no guarantees of how long we're going to be around. Right. And so with the time that we do have, let's enjoy it. You know, let's let's enjoy life. Let's enjoy our retirement. You folks out there listening, you've worked so hard your whole life. You know, you've done everything right. And now you're going into what could potentially be a scary transition. You know, you're not going to be getting that paycheck from work anymore. You've got to rely on what you've put together and plan for your retirement, you know. And so that can be scary for folks. But wealth is more than just money and finance is wealth as your health. You know, wealth is time in love and spending that time with your family and traveling, doing the things that you want to do. There's different ways to measure wealth. And and so we really focus on that here at take point. And we want to lead and take the point and lead our retirees to and through retirement.

Erick Arnett:
And it's it's really about setting those goals and having that discussion and then building a goals based plan, not just selecting product, not just selecting the next hottest mutual fund or the next hottest indexed annuity, or just picking stuff from the shelf and just plug it in there and hoping it works. It's not about that. It's about creating that, that vision, that goal that you have for retirement and then building out a plan and then selecting the right tools that are going to provide you to get to that goal and backing into what are the proper investments to make in order to do that. And, you know, so unfortunately, conventional wisdom has been, oh, I just got to find the best investments that's going to pay that's going to pay the highest rate of return. And that's just not how it's done. It's got to be it's got to be a actively managed portfolio, tactically managed. It's got to be multiple have multiple, multiple disciplines in there. But first and foremost, we have to talk about income. You know, how much income are you going to need in order to live your life successfully and happily throughout retirement? Is it 5000 a month? Is it 2000 a month? I call out your financial speed and then 5000 a month today at these rates of inflation might be six 7000 a month that you need three or four years from now or five years from now.

Erick Arnett:
Certainly, if you were doing some retirement planning three years ago, two years ago, even a year ago, before all this insane inflation hit us, you might have only been planning to for X amount of money. And now you realize, Oh man, it's going to cost me a lot more. And so what we find is when we do these plans, we can really show people OC. Let's take a look at what things are going to look like. Let's do some shadow for foreshadowing and look and really dive in and see what does this look like ten years from now, 15 years from now, 20 years now, even 30 years from now, our plans go out 30 years. Is there money still there? You know, because we got to see if the money is still going to be there. And we don't run out of money at 80 years old, 70 years old, 75 years, whatever it is, we've got to make this money last and we've got to so we've got to put that plan in place to reach your goals. But more importantly, it's not a set it and forget it type of thing. You know, we've got to review that on an annual basis and a minimum. What's changed in your life? So I'm going to venture to guess that most people haven't put a retirement plan in place and they're not sitting down and testing the plan. And then they're also not changing the plan or massaging the plan to continue to kind of move with the times and all the challenges that kind of face us.

Erick Arnett:
You've got to do that on an annual basis. And and so we're going to provide all that for you right here at Tape Point Wealth Management. And so with that being said, let's get right into it here. So smart income is a big part of our plan. You know, when we say we put together what we call a smart plan. And so the smart plan is all about smart income, smart risk, and then also smart taxes and and and making sure that the portfolio is set up correctly. And so, you know, you may have we may have covered this last week. So but reviewing the stress and importance of income over assets, too many people think that retirement is about building a nest egg. We have to plan to replace your income and fund your monthly expenses. So unfortunately, a lot of times when I sit down with folks, they don't even really they've never taken the time to even see what their monthly expenses are going to look like. And so. It was kind of shocking to me. But you got to first know, what are we spending in retirement? What are we spending currently if we're not in retirement yet, what are we even spending right now is we've got to be able to put money away for retirement. So, you know, so you've got to have a plan to replace your income and fund those monthly expenses and then also factor in inflation.

Erick Arnett:
And keep in mind, some income sources are taxable while other sources are tax free. So we've talked about having those tax bucks at taxable buckets and having your money balance between those. There's three there's really three buckets out there, right? You've got your taxable bucket, you have your tax deferred bucket and your tax free bucket. And so hopefully folks out there, you have some money in that tax free bucket because taxes are increasing, which is going to mean increased taxes on your Social Security, which is also going to mean higher Medicare costs. And so we've got to make sure that we've got some money, hopefully in a tax free bucket, which gives us the option or the alternative to to draw money from a bucket that's not going to create higher taxes for us. And so most of us have that money tied up in our 401. Ks or IRAs, and they don't know how to get to that tax free bucket. And so we can help you devise a plan there, too. And there's a strategy involved with that, you know, getting your money from taxable and tax deferred over to tax free, utilizing different tools and strategies. So real, real important, you know, the Roth IRA, the whole life policies, if you don't know anything about them, you owe it to yourself to reach out. We've got all kinds of books that we can send out to you for free that educates you on those.

Erick Arnett:
But you really owe it to yourself to to to learn about the Roth or come in and see us and we'll talk all about see if you qualify, if you qualify for Roth or how much we can do in Roth conversion for you to try to create some tax free income in the future. And then obviously a huge part is Social Security. There's so many questions around Social Security. And unfortunately, I think a lot of folks out there just kind of relied on, hey, you know, Social Security will be there and that'll be kind of what's going to take care of me in retirement. And that may or may not be good enough. You know, going forward, Social Security potentially could find some struggles in 2035, which isn't too far from now. They're talking about reduced benefits, making people work longer until they get Social Security. So, you know, we've got about ten years to really look at that, too, and to work on that. So but a little history on Social Security. The Social Security Act was signed into law in 1935 by President Roosevelt, and the first payments were made available in 1940. And, of course, we all know Social Security is one of the largest government programs in the world. But what's interesting is 176 million people paid Social Security taxes in 2021. As of April 2022, more than 65.5 million AmErickans are receiving Social Security benefits.

Erick Arnett:
So we've got a 176 million people that are paid in, and we've got about 65 million that are receiving currently. And that man, the baby boomers, are coming, right? So the baby boomers are retiring every day. It's the largest segment of our population. Another reason why we've seen such a huge influx of growth here in Florida is all those baby boomers, they're calling it quits. You know, they want to relax, they want to head south, they want to retire. And so welcome to Florida, if that's you out there listening. But let's put together a solid plan for you so you can enjoy the beautiful weather and nature out there. So but and there's a lot of different strategies for different if you're a couple, you know, there's different strategies of how to take Social Security. And so we can talk about that. We're also going to provide for you, if that's one of your concerns we can provide for you if you call today a totally free Social Security maximization report. That's also a part of our total financial plan, if that's something that you're interested in. But so, you know, as life expectancy of the AmErickans increase, there are concerns that the program will not be able to support retirees with less people in the workforce. So the Social Security Board Board of trustees has estimated that Social Security funds will be depleted by 2035 and will only be able to pay about 77% of the scheduled benefits.

Erick Arnett:
And so a lot of folks have heard this headline, and sometimes it gets misconstrued and turns into a fear and kind of a panic discussion. No. Is my Social Security just going to stop one day? And that's not what this is saying, but it is saying that, you know, Social Security has some challenges and they have to figure it out. And unfortunately, our politicians will probably keep kicking that can down the road until it becomes a real, real crunch time kind of concern. But, you know, but what what I don't think they're just going to stop your Social Security. What's going to happen is they're probably going to reduce the benefit or they will require new workers to work a little bit longer before they can get their benefit or their their full benefits. So we'll see what happens there. No reason to panic just yet, but Social Security definitely has some challenges. And that's why, you know, if imagine if they reduce your benefit. But at the same time, the cost of living is going through the roof, you know, and and I've had the the I've been blessed to be able to travel to other countries. Sam And, you know, it's crazy. How expensive these other countries are. And you can kind of see the lifestyle is much lower than here in the US because everything's so expensive. And so as AmErickans, we've always been kind of insulated from that. And we've had the luxury of of having kind of a, I don't want to say an inexpensive lifestyle, but an affordable lifestyle.

Erick Arnett:
And we've been able to advance and and be able to save money for retirement. And so we're in a lot better shape than probably some other countries, however. For the first time in the US, we're really starting to feel that pressure of those increased costs. Every time we go to ask about buying something or replacing something, you know, we just get hit with this insane cost and it's like it's wow. It's like, I can't believe how much you just said that's going to cost. It's across the board, so it's here and we definitely got to plan for it. So getting back to Social Security, you can become eligible for your benefits when you when you turn 62, of course. And if you if you've been contributing to the plan for at least ten years. And so one thing to point out here is if you haven't gone to SSA dot gov, that's SSA dot gov, you can actually go to that website and you can set up an account with your information and you can pull off your most recent Social Security report. And I think that's real important. You know, they used to send you out a every I think it was every 2 to 3 years or five years they would send you out a paper copy of your Social Security statement. They're not doing that anymore. You've actually got to go online and set that up.

Erick Arnett:
But I highly encourage our listeners to do that. So as you're kind of planning for retirement and you're kind of thinking about what is it going to cost and how much am I going to have saved? What is my financial speed we call it? You know, it's helpful if you know what you're going to be qualified for and it'll show you what your your payment would be at 62 at your full retirement age. Most people out there listening are going to be 66 and some odd months or maybe 67 is your full retirement age. And if you. Take. Keep in mind, if you if you decide to turn your Social Security on early, you will take a reduced benefit. So your full benefit doesn't come until your full retirement age, which is that 66 and some odd months or or or 67. And so for every year that you take it, prior to that, there's an 8% reduction. Now, the good news is if you decide to defer your Social Security and sometimes, Sam, when folks come in, we do our planning, they'll say, hey, you know, I want to turn that Social Security on right away. I'm concerned about it being there in the future. Well, we've got to be cautious there because, you know, there's tax taxation implications there. And so and if I tell people, if you don't really need it, you're not going to be penalized so much.

Erick Arnett:
Let's look at ways that we can continue to defer this to get you at full retirement age and then even possibly defer it past that, because now you can defer your Social Security all the way up to age 70 before you have to turn it on. So, you know, it might make sense to be able to pull from other resources and set up a cash flow plan for that period of time and let that Social Security grow and defer. Because every year that you let it grow and you defer it, it grows 8%. That's pretty solid. I mean, it's tough to find an annuity out there or an investment out there that's going to increase your income by 8%. So I encourage people to try to defer that as long as they can, if they can. However, sometimes when we sit down, we do our planning. Bottom line is to just need that income now. So we're going to go ahead and turn it on at that point in time. But there's a lot of things you've got to be concerned about there if you're still working there, certain income levels you can't earn. Above that, you'll basically start getting penalized severely. So let's look at your income income sources and let's put together a Social Security maximization report for you and your spouse or your family and really get that shirt up. That's one of the most important parts of the income plan analysis. Sam is really getting that Social Security figured out.

Producer:
Yes, Erick, and just a reminder to all the listeners out there, they can listen to past episodes of Take Point on retirement by visiting. Take point on retirement. Go ahead and schedule that complimentary consultation while you're there and checking out the past episodes. Take point on retirement. We'll be right back.

Producer:
You're listening to Take Point on Retirement. To schedule your free no obligation consultation visit, take point on retirement.

Producer:
Where's the best place to hang your hat when you retire? I'm Matt McClure with the Retirement Radio Network. Powered by a life. Whether retirement is just around the corner or several years away. Time is ticking on planning not only your finances for your later years, but where you want to live out your post-retirement life. Personal Finance Website Wallethub recently released its list of Best States to retire in 2022.

Jill Gonzalez:
Florida, unsurprisingly, ranked number one, followed by Virginia, Colorado, Delaware and Minnesota.

Producer:
While at job analyst Jill Gonzalez.

Jill Gonzalez:
The top ten continues with North Dakota, Montana, Utah, Arizona and New Hampshire.

Producer:
So what makes a state one of the best to retire in?

Jill Gonzalez:
The study was based on 47 metrics, including tax friendliness, the elderly, population, golf courses per capita and shoreline mileage.

Producer:
As for Florida, which landed the top spot this year.

Jill Gonzalez:
Florida excelled in tax friendliness, fellow retirees and things to do, but could use improvement with home health aides per capita, even.

Producer:
Though the Sunshine State is number one overall, if finances are your primary concern, you might want to consider a move to Mississippi. It ranked as the state with the lowest overall cost of living. As for tax friendliness, Alaska jumps to the top of the list. But what if you want some culture in your retirement years? New York ranks as the number one state when it comes to the number of museums per capita. The tradeoff there is, naturally, the Empire State is one of the most expensive in the country. So where do you want to spend most of your time in retirement and what factors are most important to you when considering a potential move? Those are key questions to consider as you plan for the future with the Retirement Radio Network powered by O'Mara Life. I'm Matt McClure. Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

Producer:
Welcome back to take point on retirement schedule. Your free financial consultation now at take point on retirement.

Erick Arnett:
Hey, welcome back, everybody. This is segment to take point on Retirement Radio. Thanks so much for listening. So last week we were talking and we had we had four stocks on the show, which was fantastic. And of course, Stokes is the author of Annuity 362 great book that we offer here for free. If you'd like to get a copy and please feel free to reach out to us. And but I'd like to we're talking about income and there's an income planning and the importance of Social Security, which we're going to dive a little bit more into that a little bit later. But I thought it would be appropriate to to play a chapter of Annuity 360 on on building a personal pension. I think it's important as we're talking about income today and how to build that solid income plan to get this in there. And if if you like what you hear and you're interested and you want to learn more, just reach out to us for free. We'll get that book out to you. You can go to our website, take point wealth management in the upper right hand corner. You can request that copy or you can just give me a shout. 3526160511. That's 3526160511. I'm going to get you that copy of Annuity 360. So, Sam, I think it'd be a good idea. Let's just go ahead and play that chapter right now for folks on Personal Pension Planning.

Producer:
Chapter nine, you can create your own personal pension. Big idea. Using an annuity to create a personal pension helps you create a lifetime income stream, but it also helps you leave a legacy for your beneficiaries. All annuities can create annuity income to supplement the income you need before or during retirement. Those who are approaching retirement are afraid that they will run out of money. But an annuity can help make sure you have an income you can never outlive. An annuity can be a great investment for your portfolio, but I encourage you to be careful that you don't overpay for your annuity. When you put your money into an annuity, the annuity company will pay you your money back at a date. You specify you don't want an annuity company to charge you too much to simply pay your money back to you. I'm confident that leaving a remarkable family legacy is important to you. You likely want to have money left over when you pass away to leave your beneficiaries. The goal of a personal pension is to generate lifetime income with no risk that grows your money and allows penalty free withdrawals. An annuity can create a lifetime income with market like gains and no market risk, while also allowing you to build enough wealth to leave for your beneficiaries when you pass away. Don't give the annuity company fees for doing nothing. We prefer fixed indexed annuities for our clients that do not have an income rider fee. But you can still create a personal pension without an income rider on your annuity.

Producer:
If you get an annuity with an income rider but don't utilize the features of that income rider, then you are not getting what you paid for. You are literally just paying the annuity company 1 to 2% each year. You defer annuities in your annuity without receiving a single benefit for that annual fee. This income rider fee will also draw down your account value or principle, depending on how that index is performing. The growth on your entire account value could be significantly and negatively impacted. Some accumulation focused annuities are built to deliver increasing payments without an income rider. You should consider the features your income rider is providing you before deciding to purchase it as an add on. Make sure you utilize the features you are paying for more ways to get the most out of your annuity. The longer you wait to turn on the annuity, the more you'll receive in annual payments. This is because your annuity will spend a longer time in the accumulation phase, meaning it will spend more time building up your account value. Your annual payments will grow as your account value grows. Believe it or not, you can generate your own personal pension by distributing no more than 5% a year with penalty free withdrawals. From your accumulation based annuity policy, many accumulation annuities are set up to be RMD friendly, so you won't suffer a penalty when you have to take your RMD. It would be silly for you to be penalized for something you are required to do. Annuity companies take this into account by creating products that make taking your RMDs easier.

Producer:
Inspect what you expect with any annuity. Don't just go with what the annuity agent or advisor tells you. Read it for yourself. Specifically, you should read the annuity illustration guaranteed and non guaranteed tables included within the annuity illustration. Also, please remember that annuity policy is a contract between you and the annuity company, so caveat emptor or buyer beware applies here. Be aware of the annuity you are buying and choose an annuity that works. Best for you. They will help you build a successful retirement and they'll offer you peace of mind whether you choose to generate income through penalty free withdrawals or invest annually in an income rider. Know the consequences of both. This is a decision you will make at the beginning of the investment process. One poor decision here can cost you 1 to 1 and one half percent of annual growth over a 30 year retirement. This could come out to be a significant loss. Educate yourself on your options and the specifics of each option you are considering. Making the right decision up front will save you a lot of frustration in the long run. Also, please remember that if you withdraw too much annually, say 10%, you will run out of money in 10 to 12 years. Make sure that you're working with an advisor who can help you choose the appropriate withdrawal amount so that your money lasts for your entire lifetime. As discussed above, we recommend no more than 5% be withdrawn each year from your account.

Erick Arnett:
That's just a great chapter. It kind of sums up what the importance of and and when you're sitting down making those decisions, does it make sense for me to I'm getting ready to retire from work? Or maybe I've already retired and I have this option of do I turn on a pension or do I take a lump sum? And it's not something it's really something you get to put a lot of thought into and a lot of preparation and planning don't just jump to conclusions and be like, Oh, I'm just going to turn on this pension. I like the idea that it may actually hurt you may help it may hurt you in taxation on your Social Security, may increase your Medicare costs. There's other ways that we can defer that and create still have that backup and that option to have that long term pension. But it's going to be your own personal pension, one that you own. And we can put that plan together for you as opposed to relying on a pension and keeping your money somewhere else where you don't have control of it. And so I've always tried to encourage people to say, hey, if you take that lump sum and roll it, you can actually create your own pension plan. That may or may not. We'll have to we have to look at the different offerings. But more more times than not, you can do much better and just creating your own personal pension plan and then you have control over it.

Erick Arnett:
You can turn payments on turn payments off, you know, in years that you want to reduce your income or do a Roth conversion or whatever. So we have the ability to really have our hands on the controls and to to to be able to manage the tax situation. And so real important, great chapter. And so give us a call. 352616051. I'd love to get you that free copy. It's all about educating our listeners, our retirement warriors out there. First and foremost, you got to be educated. It's your money, it's your plan. It's your responsibility. We're just here to help you and help guide you and hopefully put that plan together for you. That's going to make sense. So again, back to Social Security. You know, get that Social Security statement we talked about in the first and the first segment. If you're listening, take the time, go out there to SSA dot gov and set up that account. Pull your Social Security statement, look that over as you're looking and starting to talk about what is it that I'm going to need for income and retirement. And so, you know, a lot of people say, oh, I only need about 80% of what I made during my working years. And that may or may not be true. And so that's one of the first things we do when we sit down with our clients and say, okay, what does retirement look like to you? What are you doing and what is what is it going to cost? And we dive in and we drill down on every little detail to get that accurate number as to what it's going to cost us and then factor in inflation.

Erick Arnett:
And so factor in expenses and taxes and fees and and risk in the portfolios and and volatility and all those things that are going to hit you along the way. And so you just have to have that solid plan in place and you've got to make sure that income stream continues and stays solid for you. You know, unfortunately, I think a lot of people, they just have this kind of basic idea. I've got this and I got this portfolio that I might have to draw off in the future. And, you know, I'm going to take 5% of it or 6% of it, and everything will be great. Well, what happens in a year like this when the market's down 20% and you're also taking five, 6% out of your portfolio, now you're down 26%. You've got to make over 50% to get even back to where you were. So we look at where we're getting our income from as a total totally different source. And so first and foremost, we're going to solve for your income need and make sure that's shirt up and that you never run out of income for the rest of your life. And then we can look at what's left over and put it to work in a tactically managed portfolio to kind of grow outside of your income plan, to kind of fight inflation and also create more money for you on the back end and and money.

Erick Arnett:
And that way you don't have to tap into that if you have a bad year, you know. So sometimes if you have the. Portion of your portfolio. You've got to let that you've got to let that ride sometimes, you know, and you've got to be able to go with the ups and downs of the market. You don't want to double tap it. So really important to look at things differently. Let's set up your smart income and then what we call your smart risk is the is the portfolio that I have invested in equities. And they've got to kind of be two separate things that are all working together. But today we're really focusing on that retirement income. And another key point, I think when you're getting that Social Security and you can kind of look at the different breakdowns of it on that, on your Social Security statement is what your spouse could collect. So did you know that spouses can collect benefits based on their own earnings or their spouses earnings? So there's some strategies there where, you know, if you're at full retirement age, your spouse could continue to defer theirs and you could collect on theirs and continue to for years as well. So a lot of different strategies that people aren't aware of. We'd love to give you that Social Security maximization report. Give us a call right now at 352616051.

Erick Arnett:
We'll we'll we'll start putting that together for you and or just go to our website, take point wealth management or take part on retirement radio. And in the upper right hand corner, you can just go ahead and click and set up a time to chat with us and we'll start putting that together for you. So let's at least get that income question answered for you. You know, let's let's get that first and foremost so we don't run out of income in retirement. So the amount you can receive from Social Security is determined from your average index, monthly earnings or what they call your I me during your 35 highest earning years. So I'll say that again. The amount of Social Security is determined from your average indexed monthly earnings during your 35 highest earning years. So as of April 22nd, the average monthly benefit was about 1588, about $4,500 and $1,588, which is about 19,000 annually. So for every year you delay collecting your benefits starting at 62 and ending at 70, your benefit will increase 8%. So the max monthly benefit benefit in 2022 for people age 62 is 2364. The max monthly benefit in 2022 for people age 70 is $4,194. So depending on what you earned through your highest earning years while you're working is going to kind of really depend on what you're going to get for that Social Security pension. So super and super important to start there and see what we're going to have available there.

Erick Arnett:
And then, like we said, we might we might have to factor in inflation, we might have to factor in a reduced benefit. So these are all different things we can put into your plan. We can test it. We can put together multiple plans. If you don't have a plan, that's okay. Now's the time to get one. And we can help you build that solid retirement plan. First and foremost, shoring up that income. And so what we do there, Sam, is in that analysis and that planning is we first look at that retirement income gap. And quite simply, your retirement income gap is taking all of your your guaranteed income sources that you know you're going to have. So we really got to focus and stay focused on that Social Security benefits. So your social care benefits alone are not going to be enough to maintain your standard of living. So the average monthly benefit is about 1542 or 18,500 annually. The max monthly benefit, if you're 62, is 23, 64 or 28,000 in the max monthly benefit, if you're 70 is about 50,000 annually. So you know, it's going to be tough to live on those amount of money. So we've got to make sure we have a pension set up for you. If you don't have a pension from your work history, we can set one up for you and create your own pension and just test that out and make sure that that is going to last you throughout a lifetime and then pop inflation in there on top of it.

Erick Arnett:
You know, I'd be surprised to see when we're doing these plans, Sam. If we put in 7% inflation rates, it would probably really reduce the success of those plans and the money on the back end of the plan later on in life, 75, 80 years old. So we can do a we can do the plans. We do them out 30 years. We throw 1000 scenarios at it. So I can see with a probability, a high probability of success, how much money we're going to have at age 80, how much money we're going to have at age 85. And so it's a great tool to be able to look into the future and give us some confidence and some clarity. Is the money still going to be there? You know, are we going to have to change things or change our lifestyle? Maybe we've got to work a little bit longer. Maybe we just got to spend a lot less in retirement so we can build out those different plans. Is working for some folks the other day and I tried one planet then making a. 100,000 a year. Living on $100,000 a year. I did another one at 70,000. I did 120,000. And we can really see how that is going to affect the long term and the longevity of the plan. So. So 76% of retirees say income stability is their top concern for retirement. So what's your if you're out there listening right now, what's your concern? You know, think about it and we're happy to help you out and we're standing by to do that for you.

Erick Arnett:
That's our passion. And and so that core income, that retirement income gap is just simply taking all of those core expenses like food, clothing, shelter, taxes, health care. Keep in mind, taxes and health care, they're going to increase and all your basic needs. And then what about your discretionary expenses? How much are we eating out? What are we doing for entertainment? What are our wants? Do we want some new toys in retirement? Do we want to travel? Know if we're going to travel? We got to put that $10,000 a year budget into the plan to make sure that that's going to be available as well. And so all of these different types of expenses, we've got to make sure it's in there. So, you know, first, it's surprising to me and I know it's not fun to do. I get it. I don't like doing it either. But my wife and I, we sit down at least once a year. I'm 51 years old. She's 46. We sit we still sit down once a year and do our budget and we see how it's changed. Are we spending more? Have things have cost increased? Have they gone down? Whatever. And so are we still reaching our savings goal every year. And so that's really important for us to pay ourselves first, right? And so you've got to really sit down and get this budget figured out.

Erick Arnett:
And I make people work hard on this because it's the most important thing. And so because we got to know what do we have to be producing to to to offset Social Security, to potentially offset your pension, to make sure you have that income. And so if you take your guaranteed income sources and you take your expenses and you add you subtract those, and if you have a gap there, you have a shortage, then we've got to figure out how we're going to fill that income gap. Quite simply, if you get 5000 a month coming in and guaranteed income, but it's really going to cost you about seven or 8000 a year to or seven or 8000 a month to live and live the retirement that you truly want to live. Then we've got to come up with two or three grand a month, you know, 20, 30, 40, 50,000 a year of income. Then we got to fill that gap and we got to make sure that that's guaranteed. And it's never going away, no matter what happens. We've got to have that income in place. So you never worry about that paycheck coming in every month and meeting all of those needs and not just your basic needs, folks, you've got to enjoy retirement, too. So you've got to put in that. You've got to put in that vacation fund, that jet ski fund, that boat fund, you know, whatever it is that you're doing that that travel fund.

Erick Arnett:
So so we've got to make sure you're saving money during your high earning years, you know, and review those monthly expenses for any extraneous payments. So you may and that's why we talked about earlier, we may consider delaying Social Security. Don't be so quick to just start. Turn it on. Well, I'm 62. This is what I hear a lot, Sam, is I'm 62. I've kind of heard in the background that Social Security might not be here forever. And I get this kind of attitude, Oh, I'm not going to live that long anyway, so I'm going to turn it on. And that's okay. It's your choice. You can do whatever you want to do, but make sure you know all of the facts and how that's going to affect you first before you make that decision. So I've actually had people turn it on, then do the analysis and realize, Oh, that wasn't a good idea, and they go back and turn it off, right? And you do have the ability to do that one time. So prior to your full retirement age. So and then we've got to review all that and look at what is your investment and withdrawal strategy going to be, right? In conjunction with all of all of that all of that income and the income gap and make sure everything's working together. So consider investing in the index annuities to establish an income stream that you can never outlive. And this is why we're offering this book Annuity 360. Don't take it from us.

Erick Arnett:
Don't take it from your neighbor. Don't take it from Google or the Internet. Research it yourself. Read this book, highlight it, study it, develop your own questions and your own opinion and see if this is appropriate for you. But it is a great tool for us to provide that guaranteed income on top of your Social Security. Or if you're lucky enough to have a pension, we can put all those together for you to make sure that you always have that income you need. And so reach out to us. Give us a call today at 3526160511 or just go to our website, take point on retirement. Request that copy of the annuity 360 today and we're going to get it right out to you. Study it, highlight it, get it back, get back to us and we're going to move forward from there and build you the most optimized, solid income plan where you'll never run out of money and you'll never have to worry about income again. And the rest is all just kind of gravy, really. Once we have that income, share it up. So just to kind of wrap up, know we talked about income and in that income gap and fill in that and then we offer the book annuity 360 today so you can really dive in and understand how an index annuity can can fill that income gap and give you that 100% reserve requirement that you need to get you to and through retirement.

Producer:
It's time for this week's.

Producer:
Problem.

Producer:
Solver.

Erick Arnett:
So we had this kind of a problem solver. If we can get through this real quick, I know this show is kind of coming to an end. Can't believe it. But it just seems like we never have enough time. But the client is inheriting $2.2 million and the client and her husband generate about 180,000 in annual household income. They have two children. The client wants to retire early and place her 30,000 a year income and replace her 30 K income. She's very concerned about market volatility. They lost more than 24% in the market this year. And so they also want to reduce the fees they're paying to manage their assets. And so, boom, we've got a solution for these folks. We do this every day. The client is taking approximately a third of her assets and investing in a fixed indexed annuity that will protect the principle. You cannot lose value in an index annuity and has a free income rider that will allow her to receive income for life starting in year two without any additional charges. So she only had to use a third of her assets to replace that income and assure up a guaranteed income for life. So the value of the annuity should be expected to grow over time as it's tied to an index like the S&P 500 or the Dow, the Nasdaq bonds. We can tie to any index we want and they won't be paying unnecessary fees anymore because the bonds in their portfolio have been replaced. And they're also saving more than a half a percent in advisory fees. So these adjustments will allow the client to retire now and enjoy playing tennis with their spouse and continue to work and make 150 K a year. So that's just kind of an example. Instead of having to kind of rely on the markets or the volatility of the markets and not really knowing where your money is going to be safe, this is why these are just great tools and you really owe it to yourself to reach out so we can educate you on it.

Producer:
It's this week in history.

Producer:
Pretty interesting on This Week in History, September 4th, 1972, The Price Is Right. Began airing with Bob Barker over over 9000 episodes. Erick it's the longest running game show in the United States and TV Guide says it's the greatest game show of all time. And I've definitely watched a few episodes of The Price Is Right. How about you?

Erick Arnett:
Yeah, man, I grew up watching that. Grandma had it on all the time, and all I can remember is Bob at that long, skinny microphone. And yeah, we were just talking about this the other day. It's actually kind of funny is that, you know, you ever notice that just how Bob Barker we watched him for 40 years, 50 years, and he just never seemed to age. It's like, man, the makeup was must have been fantastic, but it was just great. It's like, what a great show and love that show. So much fun. What what a success. Fun, fun to look back on that kind of stuff.

Producer:
Absolutely. And one more. This week in history, also on September 4th. But in 1998, the technology company Google was founded by Larry Page and he was at Stanford University. And Google remains one of the most powerful brands in technology. And I think it's interesting, Erick, that a company became a verb, know people just say Google this, Google that. And it's only been a company for for a little over 20 years. Amazing. All right, Erick. And we got just a minute left. So I want to remind people one more time to visit, take point on retirement dot com. You can schedule a free consultation there. You can also check out our past episodes. So if you miss part of today's show or if you miss any of our shows any week, you can go to take point on retirement. Listen to past episodes. Please subscribe to the podcast. Let us know where you're listening from and don't forget to take advantage of that complimentary consultation. Erick, any final thoughts as we wrap it up and send these folks off on a holiday weekend?

Erick Arnett:
Yeah, just enjoy it. Enjoy the weekend, Labor Day weekend. Fantastic. Lots of fun. Be safe out there. Enjoy the weather. And then when you come back Tuesday, get focused up on building that solid retirement plan. Folks, we're here for it. Take point, wealth management.

Producer:
Thanks for listening to Take Point on Retirement. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets, to schedule your free no obligation consultation visit, take point on retirement, or pick up the phone and call 3526160511. That's 3526160511. Investment Advisory Services offered through Brookstone Capital Management LLC, BCM, a registered investment advisor and take point wealth management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated or not guaranteed, past performance cannot be used as an indicator to determine future results.

Producer:
They say you don't know what you don't know. But a growing number of states are trying to fix that when it comes to finances. I'm Matt McClure with the Retirement Radio Network. Powered by a marriage life. In high school, students are often required to take advanced math courses like algebra and trigonometry. But for years, the basics of budgeting, bank accounts and savings have been neglected in the classroom. But that seems to be quickly changing. 21 states now require at least some form of financial education before students graduate high school. One of those states is Nevada. Governor Steve Sisolak recently told CNBC. A great.

Erick Arnett:
Percentage. I think 50 some odd percent of AmErickans can't cover 1000 emergency costs if it comes up without borrowing the money.

Jill Gonzalez:
So it tells us we need to invest more. We have invested $2.5 Million from the state into these programs and to make sure that it gets out, we address access and equity so that everybody gets this education. It's not just.

Erick Arnett:
Reserved for the upper class.

Producer:
Mississippi Governor Tate Reeves also told CNBC he knows firsthand how valuable a financial education can be. He graduated with a degree in economics and worked in the financial arena before running for office, which.

Jill Gonzalez:
Is one of the reasons that I'm so passionate about trying to encourage my fellow Mississippians and really my fellow AmErickans to to to make sure that financial literacy is available to as many people as possible. Because I really do think it can help AmErickans have a better life.

Producer:
In New Jersey, Governor Phil Murphy says programs there start as early as middle school.

Jill Gonzalez:
There's a temptation that comes with a lot of different things that you all, all of a sudden think you can afford and you don't realize the consequences on the back end, whether it's physical items, whether it's meme stocks or whatever it might be. And so getting kids at the.

Producer:
Earliest ages possible, we think, is critical.

Producer:
How well are the programs working? Well, it could be too early to tell. Money rates found mixed results in a recent survey, but its authors note that financial education itself is not a quick fix. So with more time, results could improve. So how educated are you when it comes to your personal finances and planning for retirement, and are you going to pass down that knowledge to future generations? Those are key questions to consider as our financial lives become more complicated with the retirement radio network powered by a married life. I'm Matt McClure.